Understanding the geopolitical risk landscape

Geopolitical risks are complicated to evaluate. They are interconnected and often highly volatile, prompting shifts between global power centers and impacting businesses. This is why businesses and governments need to understand the deep connections between risks and find innovative ways to mitigate them.

To show how easily risks can quickly cascade, creating a complex and volatile geopolitical situation, the Zurich Risk Room analyzed the network of factors that contributed to the Arab Spring of 2011. Their work formed the basis of a model that businesses can use to help understand their exposure economic disparity. The key is for businesses to understand that in a world connected by the internet and globalization, a company can be affected by geopolitical risks crystalizing halfway across the world.

Understanding how risks are connected

By broadening their view of geopolitical risk businesses and governments can begin to see that risks never exist in isolation. Understanding how risks feed into one another can begin to inform an effective risk mitigation strategy.

Businesses and governments must focus not only on the risks themselves, but on how risks are connected.

A single risk can quickly cascade, causing far reaching geopolitical impact

Staggering Implications

The Our World Transformed: Geopolitical Shocks and Risks 2017 report demonstrates the staggering implications of interconnected risks, with 3 geopolitical risk scenarios. While speculative, these scenarios show how connected risks can coalesce with dramatic effect.

What can businesses and governments do?

Identify the key risks

Broaden your view

Develop innovative mitigation strategies